India's GDP grows 7.6% in Q2FY24 vs 7.8% in Q1FY24

India’s economy grew at 7.6% per cent in the July-September quarter as against 7.8% in the April-June quarter, showed government data on Thursday.

In the April-June quarter, the gross domestic product (GDP) growth was 6.2%. The Reserve Bank of India (RBI) had projected a growth rate of 6.5% during Q2FY24. 

The manufacturing sector, which for the past decade has accounted for just 17% of the economy, expanded 13.9% year-on-year in the September quarter, compared with a revised 4.7% in the previous three months.

"Real GDP or GDP at Constant (2011-12) Prices in Q2 2023-24 is estimated to attain a level of Rs 41.74 lakh crore, as against Rs 38.78 lakh crore in Q2 2022-23, showing a growth of 7.6% as compared to 6.2% in Q2 2022-23," said Ministry of Statistics & Programme Implementation in a statement.

"The sharp upside surprise to the second-quarter GDP figures is a welcome sign, especially as it comes in the backdrop of a broad-based pickup across most non-agricultural sectors. We, however, expect the second-half growth to moderate. Having said that, the full year GDP numbers have got a big fillip after today's figures," said Upasna Bhardwaj, chief economist, Kotak Mahindra Bank.

"The GDP growth numbers for Q2 display the resilience and strength of the Indian economy in the midst of such testing times globally," PM Modi wrote on X.

He added, "We are committed to ensuring fast-paced growth to create more opportunities, rapid eradication of poverty, and improving ‘Ease Of Living’ for our people."

"We project GDP growth to moderate significantly in H2FY24, with continuing headwinds such as the normalising base, weak outlook for agri output and rural demand, tepid global growth, narrowing differentials in commodity prices and transmission of past monetary tightening. The possible slowdown in momentum of government capex as we approach the Parliamentary Elections could constrain growth outcomes

"Given the higher than forecast outcome for Q2, we are revising our FY24 growth forecast to 6.2% from 6%," said Aditi Nayar, chief economist, ICRA.

Earlier on Thursday, the government data showed that the output of eight key infrastructure sectors rose by 12.1% in October 2023 as against 0.7% expansion a year ago. All the sectors except for fertiliser recorded healthy production growth in the month under review.

The International Monetary Fund (IMF) had in October raised India’s GDP growth forecast for India for the financial year 2023-24 to 6.3%, its second upward revision since the April report.

IMF attributed stronger-than-expected consumption during April-June for the upward projection in the growth estimate.

Recently, industry body FICCI in a survey found that the Indian economy is projected to grow by 6.3% in 2023-24 with a minimum and maximum growth estimate of 6% and 6.6%, respectively.